Tire demand is rebounding more robustly than projected earlier in all the key replacement and OE segments, prompting the Rubber Manufacturers Association (RMA) to revise upward its shipments forecast for 2010.
Led by a projected 38-percent increase in OE passenger tire demand, shipments overall should increase about 8 percent this year to 282 million units, or roughly what the industry shipped in 2008, the RMA said.
The increase in shipments reflects an economy re-emerging from the severe economic downturn coupled with the recent turnaround of the domestic automotive manufacturers and a return to established driving habits, the RMA said. High unemployment, low consumer confidence and continued depressed home values, however, continue to weigh on the consumer.
The latest forecast is a marked improvement over projections released in March, when the RMA anticipated 2010 shipments would increase about 3 percent over 2009 to 267 million units.
On the replacement side, the RMA is forecasting growth of about 15 percent for medium and heavy truck tires to 15 million units as a result of the better-than-expected commercial sector recovery. Growth will slow next year to about 4 percent, or 600,000 units.
Replacement passenger tire shipments should rise more than 5 percent over the depressed 2009 total to 199 million units before slowing somewhat next year to a more modest 1 percent, the RMA said.
Recovering demand for replacement light truck tires should drive shipments up 3 percent this year to 28 million units, the RMA said, but then should level off next year. The RMA attributed the 2010 gains to the extension of the first-time homebuyers' tax credit, which provided a temporary boost to the housing/construction industry, where many of the vehicles equipped with LT tires are used.
OE passenger tire shipments should grow to about 34 million units, the RMA said, as new vehicle sales have been robust led by various buyer incentive and financing programs. Demand should continue to grow next year to 37 million units, the RMA said, as the economy emerges slowly from the current recession.
Demand for OE light truck tires is expected to push shipments ahead by 13 percent to nearly 3.2 million units, the RMA said, due to stabilizing economic conditions. The recovery should continue into 2011 with a gain of about 100,000 units.
OE shipments of medium/heavy truck tires are expected to rise nearly 16 percent to about 2.8 million units and continue into 2011 with an added gain of 800,000 units, or more than 28 percent ahead of 2010, according to the RMA.
The RMA did not comment on trends for domestic production or imports.